In my case, I only have Dropbox and TortoiseSVN. Dropbox is really becoming annoying - after every update, I need to run a script I made that deletes Dropbox's overlays from registry and then restarts Windows Explorer.

I understand that Windows limits overlays to 15 probably because of performance.
However, would increasing to 25~35 cause a huge performance impact?
Why hasn't Microsoft realized yet that this is a very popular issue and tried to make a fix for this?
Why isn't there, at least, an option that advanced users can change to increase this limit?

I asked this Microsoft some time ago and they tell me "perf issues" as reason. They don't increase the limit, they also have plans to kill them completely.
– magicandre1981Jan 12 '17 at 21:26

It isn't just performance. In the current implementation there are 4 bits in a structure that define the overlay index providing for a maximum of 15 overlays. The more significant bits needed to increase this number are used for another purpose. The only way to get more overlay icons would be to change the implementation and that would have major compatibility implications. There are large numbers of applications (well written applications that follow all the rules) that rely on the current implementation and would break if it were changed.
– LMiller7Jan 12 '17 at 22:11

1 Answer
1

In my case, I only have Dropbox and TortoiseSVN. Dropbox is really
becoming annoying - after every update, I need to run a script I made
that deletes Dropbox's overlays from registry and then restarts
Windows Explorer.

Since the current limit cannot be changed its not possible for us to predict what sort of performance impact there would be if the limit was increased.

Why hasn't Microsoft realized yet that this is a very popular issue
and tried to make a fix for this?

I would presume it effects less people then you think it does. Only somebody, from the Windows Shell team, would actually know this answer. Until Microsoft makes their decision decision known, we can only make educated guesses, which basically would be that nobody has increased the limit.

Why isn't there, at least, an option that advanced users can change to
increase this limit?

Only somebody, from the Windows Shell team, would actually know this answer. Until Microsoft makes their decision decision known, we can only make educated guesses, which basically would be that nobody has written the code to allow us to increase the limit.

Raymond Chen a Microsoft Developer says the following about icon overlays

Generally speaking, overlays are not a good way of presenting
information because there can be only one overlay per icon, and there
is a limit of 15 overlays per ImageList. If there are two or more
overlays which apply to an item, then one will win and the others will
lose, at which point the value of the overlay as a way of determining
what properties apply to an item diminishes since the only way to be
sure that a property is missing is when you see no overlay at all. (If
you see some other overlay, you can't tell whether it's because your
property is missing or because that other overlay is showing instead
of yours.)

Mr. Chen also stated:

Another example of applications having a selfish view of performance
came from a company developing an icon overlay handler. The shell
treats overlay computation as a low-priority item, since it is more
important to get icons on the screen so the user can start doing
whatever it is they wanted to be doing. The decorations can come
later. This company wanted to know if there was a way they could
improve their performance and get their overlay onto the screen even
before the icon shows up, demonstrating a phenomenally selfish
interpretation of "performance".